2018 Theses Bachelor's

Formal Institutions & Trust: A Comparative Study of Social Trust Formation

Baconschi, Stefan

This thesis presents evidence on the relationship between the people’s perception of the quality of their country’s formal institutions and their likelihood to express higher levels of social trust. I use regression analysis in a quasi-experimental framework in order to measure the differential effect of a variation in institutional quality on the evolution of social trust among individuals who possess different characteristics, which make them more or less likely to perceive and appreciate that variation. I use World Values Survey and the European Values Survey cross-sectional survey data that covers the period 1993 through 2012 in six waves. The variation used is the creation and subsequent success of a powerful anticorruption agency in Romania that has been tasked with the prosecution of high-profile individuals in corruption-related offenses since 2006. I find that the institutional variation has a stronger effect upon the evolution of generalized social trust among urban respondents in the post-treatment period, but not among frequent newsreaders and those who report a greater level of interest in politics. I also find that the treatment has a positive differential effect on the level of institutional trust reported by frequent newsreader and people who are interested in politics, but not urban respondents. However, given the quasi-experimental nature of the research design and the limitations of the two datasets used in this thesis, causal identification is difficult and the empirical results should therefore be interpreted with caution.